Ausgold's (ASX:AUC) Katanning gold project in Western Australia shows a "compelling" development opportunity after recent definitive feasibility study, according to a Tuesday Euroz Hartleys note.

The company on Tuesday said an updated definitive feasibility study confirmed that its Katanning gold project in Western Australia is development-ready, with a long mine life, fast payback period, and "excellent" financial returns.

The updated definitive feasibility study supports a mine life of more than 10 years, producing 1.2 million ounces of gold, with early years averaging 143,000 ounces per year at all-in sustaining costs below AU$2,200 per ounce, and pre-production capital expenditure of AU$354 million, the research firm noted.

The research firm believes that Ausgold's control of the Katanning greenstone belt provides significant exploration upside to extend mine life and boost production levels.

Euroz Hartleys maintained a speculative buy rating on AUC and raised its price target to AU$2.10 from AU$1.95.

The company's shares rose almost 7% in recent Wednesday trade and earlier hit their highest since January 2013.